{"url_path":"/sec/inis/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-20","source_url":"https://www.sec.gov/Archives/edgar/data/1038277/0001437749-26-017906-index.html","accession_number":"0001437749-26-017906","cik":"0001038277","ticker":"INIS","issuer_name":"RADNOSTIX INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1038277/0001437749-26-017906-index.html","primary_entity_key":"0001038277","primary_entity_name":"RADNOSTIX INC"},"word_count":1617,"has_tables":true,"body_markdown":"**ITEM 1A. RISK FACTORS**\n\n \n\nThere have been no material changes or updates to the risk factors previously disclosed in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, except as set forth below:\n\n \n\n**Volatility in raw material and energy costs, interruption in ordinary sources of supply and an inability to recover unanticipated increases in energy and raw material costs from customers could result in lost sales or significantly increase the cost of doing business.**\n\n \n\nMarket and economic conditions affecting the costs of raw materials, utilities, energy costs, and infrastructure required for the delivery of our goods and services are beyond our control and any disruption or halt in supplies, or rapid escalations in costs could affect our ability to manufacture products or to competitively price our products in the marketplace. Our reliance on a just-in-time supply chain for radioisotopes could cause significant and irreversible harm to our business, including delays in manufacturing and commercial operations. Unlike traditional pharmaceuticals that can be stockpiled, our business is uniquely dependent on a just-in-time supply chain for our radioisotopes and finished products. The radioisotopes we use have a medium-to-long half-lives. This physical constraint means we have limited ability to maintain inventory as a buffer against disruption. Any delay at a single point in our supply chain (for example: from a production outage at a nuclear reactor or cyclotron to a logistics failure, an equipment malfunction, or a regulatory hold) could render an entire shipment partially or completely unusable. Such a failure would not only result in a total loss of product and revenue for that product but would also have a direct, negative impact on patient care and could delay or halt customer’s clinical trials. The complexity of this supply chain, including reliance on specialized facilities and highly regulated global transport, represents a fundamental and unavoidable risk to our business and future growth.\n\n \n\nFor instance, an interruption in the supply of isotopes such as cobalt-57, cobalt-60, or iodine-131 could result in lost sales in our Calibration & Reference Products, Cobalt Product, and Theranostics Products segments.\n\n \n\nWe are in ongoing discussions regarding the long-term viability of some territorial or regional distributors and may need to procure new distributors. If we are unable to do so, we would have a loss of revenue.\n\n \n\nWe purchase a significant portion of our raw material radioisotopes from overseas suppliers, some of which are government agencies or work with government agencies for the manufacture of radioisotopes. The price and availability of those products could be adversely affected through changes in currency exchange rates, tariffs, sanctions, geopolitics, national security classifications, embargos, regional conflicts, or other restrictions. \n\n \n\nStarting in January 2024, there has been a continuing global outage of gadolinium-153, a key isotope for our Calibration & Reference Products segment. We are working on establishing new suppliers and believe that we will be able to have supply restored by the end of 2026; however. if we are unable to do so, we would experience a loss of revenue in the Calibration & Reference Products segment.\n\n \n\nWe are continuing to search for additional means to produce and procure certain critical isotopes, including through our joint venture with Alpha Nuclide Inc., which we entered into in June 2024 for our I-131 and Radqual products.\n\n \n\nDuring multiple weeks in March, July, and August of 2025, we had low quantities or complete outages for our Theranostics Products segments’ raw material radioisotopes. These constraints in supply resulted in loss of revenue for our Theranostics Products segment. In June of 2025, the FDA approved an additional raw material radioisotope supplier. Our I-131 products are highly reliant on research reactors for this supply; research reactors have a higher frequency of down time compared to traditional power reactors.\n\n \n\nTo our knowledge and based upon review of FDA publications, we are the only domestic-based manufacturer of finished cobalt-60 sources and are sole-sourcing cobalt-60 from the Idaho National Lab (“INL”), located less than 60 miles from our facility. We work through the U.S. Department of Energy’s (“DOE”) National Isotope Development Center and the Office of Science and INL to coordinate manufacturing and delivery schedules. There are known risks related to the DOE supply chain including:\n\n \n\n \n\n-\n\naccess to cobalt-59 pellets, which is the necessary feed stock for irradiation;\n\n \n\n \n\n-\n\nreliance on research reactors for medical isotopes and our reliance in particular on the Advanced Test Reactor (“ATR”) at INL that will have planned maintenance in 2027 which could disrupt our access to isotopes;\n\n \n\n \n\n-\n\nATR’s main goal is to service the U.S. Navy’s nuclear fleet and there is a risk that the ATR would need to solely focus on Naval operations and thus not be able to supply us with cobalt-60; and\n\n \n\n \n\n-\n\nour reliance on ATR means that we are subject to availability and ongoing access to products from the ATR and any transition to another reactor would be time-consuming and complicated.\n\n \n\nDisruptions to our supply chain have in the past and may in the future, impede our ability to meet product demand for our customers, which would harm our sales and revenues.\n\n \n\n30\n\n[Table of Contents](#toc)\n\n \n\n**If the FDA concludes that we have failed to comply with applicable regulations, it could take various actions including: issuing warning letters, imposing civil or criminal penalties, suspending regulatory approvals, requiring product recalls, seizing products, or enjoining future violations. Such enforcement actions could have a material adverse effect on our business, results of operations and financial condition.**\n\n \n\nWe are subject to ongoing FDA regulations, including complying with the FDA’s current Good Manufacturing Practice (cGMP) requirements, and are subject to regular inspections of our facilities. If the FDA concludes that we have failed to comply with applicable regulations, it could take various actions including: issuing warning letters, imposing civil or criminal penalties, suspending or withdrawing regulatory product approvals, requiring product recalls, seizing products, enjoining future violations, or suspending or withdrawing some or all FDA facility approvals and licenses. Such enforcement actions could have a material adverse effect on our business, results of operations and financial condition.\n\n \n\nIn April 2025, an FDA inspection at our Idaho Falls facility resulted in an Official Action Indicated (\"OAI\"). RNX has developed and implemented corrective actions and submitted our 15-day, 90-day, and 180-day, 270-day, and subsequently submitted our 1-year updates. Upon the completion of our corrective actions, we will submit to the FDA and will request a reinspection of the facilities. There is a risk of additional action by the FDA up to and including a manufacturing and distribution hold or a warning letter. RNX continues to manufacture and distribute during the on-going corrective action implementation, and we believe we are on a pathway to implement and finalize our corrective actions within Q2 of 2026, and without any adverse effect on our business, results of operations and financial condition. While we believe that our corrective actions in response to the OAI will be deemed satisfactory, there can be no assurance that the FDA will not require additional corrective actions or take further actions as listed above.\n\n \n\nIn the three months ended March 31, 2026, we had two product recalls. Both recalls are being conducted with the knowledge of the FDA. The first was a voluntary recall of our Generic Sodium Iodide I-131 due to the discovery of septum in our finished product vials on January 26, 2026. We had recently been approved by the FDA to implement new septum for our finished products, with this change we discovered the septum did not perform equivalent to our previous testing and validation. The impact from this recall was limited to that first batch. The second recall was on February 19, 2026. We discovered during an internal review that specific lots of our Dibasic Sodium Phosphate Capsules that may be provided with our Generic Sodium Iodide I-131 kits manufactured between 2022 and 2025 were out of specification for final capsule weight. We initiated a voluntary recall of specific lots of our Dibasic Sodium Phosphate Capsules shipped between August 19, 2024 to February 17, 2026. We notified affected pharmacies, clinics, and veterinarians of the voluntary recall. We continue to provide Generic Sodium Iodide I-131, which was not impacted, to the majority of our customers \n\n \n\n**We may be subject to NRC license enforcement actions.**\n\n \n\nWe are subject to ongoing NRC regulations, including complying with the NRC’s current Code of Federal Regulations (CFR) requirements, and are subject to regular inspections of our facilities. The NRC may take enforcement action in the event that we are found to be in violation of NRC regulations or in violation of any of our license requirements. Consequences of violations depend upon the severity of the violations as well as the adequacy and timeliness of corrective actions implemented by the licensee to investigate and correct the cause of the violation and to prevent reoccurrence. The NRC has discretionary authority in the action they choose to take against license violations, but these actions can include civil penalties and restrictions upon licensee operations or license suspension. The imposition of any such penalties and/or restrictions upon our operations or suspension of our license could have a material adverse effect on our financial condition and results of operations. In 2025 we entered into a settlement agreement with the NRC related to our 2022 asset sale and sublease to Pharmalogic, and such settlement carried no fines, penalties or violations. However, we will have to commit to various non-material administrative tasks as a license condition for a 36-month period, starting on September 30th, 2025. We do not anticipate any material costs from the settlement, however our strict adherence to the confirmatory orders is required through the 36-month period and any violation way bring NRC action."}